Most succinct = "You're breaking up" (i.e. the connection is deteriorating to the extent that your voice is getting so distorted that I can hardly make out what you're saying, and/or your voice is intermittemtly disappearing entirely").

Note that from the speaker's point of view, it's always the other person who's breaking up. We can always hear what we're saying, so nobody ever says "We're breaking up" unless they're discussing their love lives.

"We {were / got} cut off" hints at the possibility that the connection was deliberately severed. "Somebody cut us off" makes that a direct accusation.

"The line {went dead / dropped}" is factual, with no attribution of blame implied.

"We {were / got} cut off" hints at the possibility that the connection was deliberately severed. "Somebody cut us off" makes that a direct accusation.

Erik, you make excellent points. The one above got my head wondering. Why is it "cut off" when the most likely reason was an unplugging of the line (when switchboards had plugs) or someone putting down the keys on the telephone - the least likely - unless you were in a Hollywood cowboy film, a village in occupied France in the 1940s or sometimes in a storm - was the line had actually been severed.
But then you can be: cut off by the sea, cut off from your friends. So maybe cut off does not require a physical bisection of the line but merely is an indication of a singular event being the cause.

Why is it "cut off" when the most likely reason was an unplugging of the line (when switchboards had plugs) or someone putting down the keys on the telephone - the least likely - unless you were in a Hollywood cowboy film, a village in occupied France in the 1940s or sometimes in a storm - was the line had actually been severed.

When one person interrupts another in conversation, they are said to be cutting them off.

So to my mind, the phrase's allusion is to an interruption rather than to a physical cutting of the phone line — in other words, a severing of the flow of conversation.

Why is it "cut off" when the most likely reason was an unplugging of the line (when switchboards had plugs) or someone putting down the keys on the telephone - the least likely - unless you were in a Hollywood cowboy film, a village in occupied France in the 1940s or sometimes in a storm - was the line had actually been severed.

When one person interrupts another in conversation, they are said to be cutting them off.

So to my mind, the phrase's allusion is to an interruption rather than to a physical cutting of the phone line — in other words, a severing of the flow of conversation.